Security Group Settles $5 million with CFPB for Improper Debt Collection
“The Bureau of Consumer Financial Protection (Bureau) announced a settlement with Security Group Inc., a South Carolina corporation, and its subsidiaries, Security Finance Corporation of Spartanburg and Professional Financial Services Corp.
As described in the consent order, the Bureau found that the Security Group entities violated the Consumer Financial Protection Act by making improper in-person and telephonic collection attempts on consumer installment loans and retail sales installment contracts. The Bureau found that these improper attempts included physically preventing consumers from leaving their homes and visiting and calling consumers’ places of work while knowing that those contacts could endanger the consumers’ employment. The Bureau also found that the Security Group entities violated the Fair Credit Reporting Act by regularly furnishing inaccurate and incomplete information about consumers to credit reporting agencies.
Under the terms of the consent order, Security Group and its subsidiaries are barred from certain collection practices, and must correct certain inaccurate information about consumers they furnished to credit reporting agencies, and pay a $5 million civil money penalty.”
Press Release found at the CFPB website.
CFPB Consent Order Findings Against Security Group and Subsidiaries
“Making in-person visits to a consumer’s home, neighbors’ homes, the consumer’s place of employment, or any public place in connection with collecting or attempting to collect debt;
Placing a call to any third party about a consumer’s account after the third party has notified Respondents, orally or in writing, that the person wishes Respondents to cease further communication with the person;
Placing a call to a consumer’s workplace if Respondents know, or have reason to know, that such calls are inconvenient to the consumer or prohibited by the employer; and
Except as permitted by state law, disclosing the existence of a consumer’s delinquent debt to any third party in connection with collecting or attempting to collect a debt from the consumer, unless the consumer, after default, provided his or her voluntary, affirmative, and specific written permission on an opt-in basis for the third-party communication.”
CFPB Security Group and Subsidiaries Compliance Plan
“Within 30 days of the Effective Date, Respondents must submit to the Enforcement Director, for review and determination of non-objection, a comprehensive compliance plan designed to ensure that Respondents’ credit reporting and collection of installment loans comply with applicable Federal consumer financial law and the terms of this Consent Order (“Compliance Plan”). The Compliance Plan will, at a minimum:
a. Include detailed steps for addressing each action required by this Consent Order;
b. Require that Respondents regularly monitor their records of incoming and outgoing consumer telephone cans to ensure compliance with applicable federal consumer financial laws;
c. Require that Respondents implement an effective method of logging requests by consumers and third parties not to be contacted about a particular consumer’s account and ensuring that those requests are honored;
d. Require ongoing education and training in applicable federal and state consumer protection laws and the applicable terms of this Consent Order for all appropriate employees, with training tailored to each individual’s job duties or other role within the company. Respondents will document their training program and will review and update their training program at least annually to ensure that it provides appropriate individuals with the most relevant information;
e. Require a consumer complaint monitoring process, including the maintenance of adequate records of all written, oral, or electronic complaints, formal or informal, received by Respondents and the resolution of the complaints and inquiries;
f. Include a draft notice and describe in the detail the method of notification that Respondents intend to use to satisfy the requirements of Paragraph 68.d;
g. Require that the Compliance Plan be updated at least semi-annually-or as required by changes in laws or regulations, or changes in Respondents’ business strategies or activities-to ensure that the Compliance Plan remains current and effective; and
h. Include specific timeframes and deadlines for implementation of the steps described above.”
The Full Consent Order Provided by the CFPB here.